French PM urges lawmakers to approve fiscal treaty

AP News
Posted: Sep 19, 2012 8:48 AM
French PM urges lawmakers to approve fiscal treaty

PARIS (AP) — French Prime Minister Jean-Marc Ayrault urged lawmakers on Wednesday to ratify Europe's "Fiscal Compact," an agreement aimed at slashing spending and containing the debt crisis.

A legislative package that includes a bill laying out how the government plans to erase its deficit and what happens if it strays from that path will go to Parliament next week. A vote has not yet been scheduled.

France hasn't balanced a budget in decades and has regularly flouted European requirements that deficits be less than 3 percent of gross domestic product. In 2011, its deficit was 5.2 percent of GDP.

France is not the only European country to have ignored those rules — and the fiscal compact hopes to end those breaches, in part by leveling penalties on countries when they're in violation.

The bill to ratify the treaty and enact stricter budget rules is expected to pass but not sail through France's parliament, partially because of discontent in President Francois Hollande's own party.

Hollande campaigned earlier this year on a promise to renegotiate the budget treaty to add growth measures and to veto it if they weren't included. In the end, though, Hollande settled for a separate growth pact that will accompany the fiscal compact.

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Both opponents of Hollande and members of the left wing of his own Socialist party have complained that the pact falls well short of what's needed to restart sluggish growth in austerity-hit Europe.

But Ayrault on Wednesday sought to paint the fiscal compact, and the growth addendum, as a French victory.

"The boundaries have shifted in Europe," he said. "The French vote has made the boundaries shift."